Affirm Shares Once Fell 10% in Morning Trading

Affirm shares once fell 10% in morning trading.

Affirm Holdings Inc. raised some of its financial targets as the buy-now, pay-later startup sought to reassure investors about its funding sources following a delay to a proposed asset-backed securities sale last week.

Affirm now expects revenue of at least $335 million in its fiscal third quarter, up from an earlier forecast of $325 million to $335 million, it said Monday in a statement. The company also raised the forecast for its full fiscal year 2022.

Affirm postponed its asset-backed securities sale on Friday, after a major investor in the top-rated portion of the deal, also its largest tranche at more than $400 million, backed out at the last minute due to general market volatility, Bloomberg reported. Shares in the firm dropped almost 16% following the news. Affirm, which uses a diverse range of funding sources including committed warehouse credit facilities and ABS issuances, said on Monday it had $9.3 billion in fully committed funding capacity at the end of February.

“In the current volatile market environment for pricing ABS issuances, the company’s diversified funding strategy allows it to maintain discipline by leveraging other sources of liquidity with attractive economics,” Affirm said.

For fiscal year 2022, the company anticipates revenue of at least $1.31 billion, compared to an earlier range of $1.29 billion to $1.31 billion, it said. Affirm also had cash and cash equivalents of more than $2.5 billion as of the end of last year, it said.

Affirm’s $9.3 billion in committed funding capacity gives it the ability to fund more than $20 billion in annual gross merchandise volume. Affirm is expecting that measure to reach at least $14.78 billion in its fiscal year 2022, ahead of a previous expectation of $14.58 billion to $14.78 billion, it said.